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AGOA ENDS, US NOW TO OFFER PROSPER AFRICA

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MAPUTO, MOZAMBIQUE – African countries such as Eswatini will now have to make the most of the next six years while benefitting from AGOA.


This is because America will now be pushing ‘Prosper Africa’ as its trade vehicle with the African continent and will not renew the African States Growth and Opportunity Act (AGOA). The United States of America reminded Africans yesterday that AGOA was never meant to be permanent.


The new programme, which reflects President Donald Trump’s new policy on Africa and valued at about US$50 million, was unveiled about six months ago but was unpacked for the African leaders and delegates yesterday.


It comes amid growing attention being given to the African continent by the likes of China, which pledged US$60 billion in aid with a large footprint on infrastructure projects.


Blow


In Eswatini, AGOA provides thousands of jobs in the textile and apparel industry and this piece of news will come as a blow to the country’s job creation efforts. That is if Trump’s new programme does not serve as a better alternative to the tax-free exports to the US market that has been exploited largely by Asian businesses while America businesses have traded less with Africa. This is what Trump seeks to change. 


Speaking at the opening session of the US-Africa Business Summit here yesterday, Deputy Secretary in the United States Department of Commerce Karen Dunn Kelley, said Prosper Africa (PA) answers the call by companies to the US Government to make it easier to access its trade and investment support services.


She said it had been realised that Africa was one of the fastest growing continents yet trade between America and Africa had declined by 32 per cent since 2014 while growing with other trade regions of the world.


Factors


She said several factors were responsible for this and these formed the key focus for Prosper Africa.
Minister of Commerce, Industry and Trade Manqoba Khumalo said after listening to the presentations, it was clear that America had no intention of extending AGOA beyond 2025 and came across as a reaction to what the Chinese have done in Africa in terms of infrastructure development.


Asked on how government intends to approach this new development, Khumalo said it was for Eswatini to understand Prosper Africa better; how to access the funds and how they compared with other facilities in terms of cost of the money.


“Secondly, it opens doors to other US companies that may wish to have a more investment type relationship through Public Private Partnerships (PPPs). We are supposed to have a PPP framework as a country, which hasn’t been tested, so this will allow us to step it up and leverage on Prosper Africa,” he said.  The minister said at face value PA seemed to be more bilateral with companies which is slightly different from the approach of AGOA and could affect the objectives of the African Continental Free Trade Area (AfCFTA).


“It was very clear from when it was initially announced in the USA that it was not designed to work with trading blocs but rather individual countries. This may affect the ideals of AfCFTA,” he said.

However, the minister said PA addresses the unique needs of a country and it was now up to Eswatini to design what could benefit her the most from the programme. Kelley explained that Prosper Africa was not an aid programme but was a new trade approach adopted by the government to unlock opportunities to do business in Africa, benefitting companies, investors and workers, both in Africa and the United States.

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